GST body dismisses profiteering claims against Maruti Suzuki

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The National Anti-Profiteering Authority (NAA), the quasi-judicial body under the Goods and Services Tax (GST) system, has dismissed allegation of profiteering against Maruti Suzuki India Ltd. A complainant had alleged that the carmaker had profiteered by not passing on the benefit of tax reduction on four car models – WagonR VXI AMT, Alto 800 LXI, Swift VXI and Wagon R VXI – at the time of implementation of GST from July 1, 2017. After the investigation report submitted to NAA, it concluded that in case of three car models, Maruti had reduced the base price.

For the fourth car model, the increase in base price was ‘very negligible’. “It was also observed that…even this negligible increase was on account of reduction discount while the base prices excluding discounts had remained the same,” NAA said in its order. The government has received hundreds of complaints under GST’s anti-profiteering mechanism. The clause was introduced to ensure businesses transfer the benefit of the tax credit to the consumer by making products cheaper. If this is not done, the NAA can then impose penalty, cancel registration of the supplier or return the amount of benefit not passed on, along with an interest of 18 percent, depending on the details of the case.

NAA is the top decision-making body under GST’s anti-profiteering mechanism, headed by chairperson BN Sharma and four technical members. The framework of the mechanism comprises a standing committee, screening committees in every state as well as the Directorate General of Safeguards, now renamed as DG anti-profiteering (DGAP). If consumers feel that the benefit of a rate cut is not being passed on to them, they can directly approach the state’s screening committee for relief. Once DGAP completes the investigation, the case is then sent to NAA, which issues the final order. Complaints started pouring in after the GST Council in November, 2017 cut rates of over 200 items across various slabs. The rate rationalisation continued earlier this year in January, July and again in December, 2018.

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